Another Predictable Trade Alert: Charts Tell The Story
Suntech Power Holdings Co., Ltd. (STP) is a solar energy company that designs, develops, manufactures and markets a variety of photovoltaic cells and modules. It also provides PV system integration services in China. The Company’s products are used in a variety of residential, commercial, industrial and public utility applications in various markets. Suntech sells its products in various key solar energy markets worldwide.
As you see from the intra-day chart, $15.00 held weak support. $14.80 was the next key support from which the stock bounced back up. With this information in hand from the charts, trade STP on the short side once this support is taken out. As evident, with $14.80 support broken, the stock drops very quickly to $14.40 levels, providing easy profits.
Again the trade was predictable because buyers place their stop losses below critical supports. Once that support breaks, a series of stop losses get triggered putting additional pressure on the stock. This provides excellent shorting opportunity to profit from.